According to China’s current regulations, individuals who do not have a residence in China, but have lived for more than five years, should pay personal income tax on all income from outside China from the sixth year onwards. However, if you leave the country for more than 30 days you can recalculate for 5 years and achieve reasonable tax avoidance.
The regulation has been changed since March 16, 2019, at that time the Ministry of Finance and the State Administration of Taxation issued the Announcement No. 34 of 2019, “Announcement on the Judgment Standards for Individuals’ Living Time without Residency in China” (hereinafter referred to as Announcement No.34), concerning foreign individuals in 2018 (inclusive). According to the regulations the previous years of residence will be cleared, and the days of departure from the country will be counted as days of leave.
Briefly, the regulations state that after 2019, a person who has lived in China for a total of 183 days in a tax year is considered as a resident, if the previous six years in China have accumulated 183 days of residence per year and there is no single departure for more than 30 days in one year, the domestic income from China and income overseas shall be subject to personal income tax in China. If the accumulated number of days of residence in China in any of the previous six years is less than 183 days or a single departure exceeds 30 days, the income derived from outside China and paid by overseas units or individuals is exempted from personal income tax in China
This announcement shall come into force on January 1, 2019.The introduction of new regulations, for foreign (including Hong Kong, Macao and Taiwan) individuals, means that the year of residence in the mainland before 2019 will be all counted to zero. Moreover, as long as the time of stay in China is less than 24 hours, you can count it as a leave day (including departure from and coming into china days).
It can be concluded that the Chinese government is determined to increase tax incentives to all foreigners, Hong Kong, Macao and Taiwan individuals.